For courses in International Trade.

International Trade: Theory and Policy provides engaging, balanced coverage of the key concepts and practical applications of the discipline. An intuitive introduction to trade theory is followed by detailed coverage of policy applications. With this new edition, the author team of Nobel Prize-winning economist Paul Krugman, renowned researcher Maurice Obstfeld, and Marc Melitz of Harvard University continues to set the standard for International Economics courses.

Features The text presents a balance of theoretical and practical coverage of international trade. Chapters on core theory are followed by a series of application chapters that confront policy questions using the newest empirical work, data, and policy debates. This structure enables students to grasp theoretical concepts and then see those same concepts in action, aiding retention and highlighting the relevance of course material. Key coverage includes the following:

An integrated, empirical-based treatment of the latest models of trade, such as the gravity, Ricardian, factor endowments, and imperfect competition models. A thorough discussion of the causes and effects of trade policy focused on the income-distribution effects of trade. An emphasis on the potential substitutability of international trade and international movements of factors of production, featuring an analysis of international borrowing and lending as intertemporal trade - the exchange of present consumption for future consumption.

New to this edition

Case study on trade and unemployment discusses the potential links between import competition from developing countries especially China and declining manufacturing employment in the US (Chapter 4). Box explores how the compensation of capital owners relative to workers has increased in the US (Chapter 5). Box discusses recent evidence showing that the gains from trade have a pro-poor bias because consumers with relatively lower incomes tend to consume a relatively higher share of their income on goods that are more widely traded (Chapter 6). Box explains how many of the goods we consume are produced offshore in ‘Global Value Chains’ and how this recent trend leads to misleading statistics for bilateral trade deficits (Chapter 8). Box discusses ‘Brexit’ - Britain’s vote to leave the European Union (EU) (Chapter 10). Research suggests that rapid changes in international trade flows have larger adverse effects on workers than previously realised (Chapter 12). Additional coverage of relevant topics and events including the impact of the North American Free Trade Agreement (NAFTA) on car production in Canada, Mexico, and the United States; and how the US sugar industry has been able to keep the price of sugar in the US substantially above the world price in recent years.